1048 REPORT OF SPECIAL STUDY OF SECURITIES !V~ARKETS TABLE VIII-29.--Size of large block, purchases and sales of ,s by selected institutions (by size of block and type of institution, 1961) [Median value per block in thousands of dollars]

Open-end investment College All insti- Pension Life Nonlife companies Closed-end endow- Founda- CoIilxnon Size of block tutions funds insurance ihsura~ce investment ment tions trust companies companies! companies funds funds Load No load

purchases ...... 410 183 1, 000 621 1,324 614 473 378 504 $1,000,000 and over ...... 1, 658 1, 172 1, 500 1, 500 2, 590 (~) 1,333 1,666 1,153...... Less than $1,000,000 ...... 270 165 556 594 587 548 406 331 370 Listed purchased primarily on exchanges.. 5O3 236 817 621 2, 429 771 658 437 478 $1,000,000 and over ...... 1,807 1,221 1,400 2, 996 1,333 1, 048 1,160 ...... Less than $1,000,000 ...... 347 175 698 616 776 630 379 366 242 Listed stocks purchased primarily over the counter ...... 311 198 794 ~93 1, 128 (~) 577 397 501 $1,000,000 and over ...... 1, 605 1, 079 1, 537 3, 215 0) O) Less than $1,000,000 ...... 257 180 282 772 (9 411 237 478 Unlisted stocks purchased over the counter ...... 384 161 1, 000 627 1, 127 257 421 262 685 $1,000,000 and over ...... 1, 600 1,500 l, 260 1, 600 (9 O) Less than $1,000,000 ...... 246 152 567 568 257 401 246 £11 sales ...... 402 262 538 621 1,098 464 887 377 558 $1,000,000 and over ...... 1,960 1,738 2, 549 l, 624 2,381 1,457 1,472 1,633 ...... Less than $1,000,000 ...... 295 229 453 453 426 571 340 442 1 Listed stocks sold primarily on exchmages ...... 558 310 692 737 2,122 590 1,094 546 668 2~ $1,000,000 and over ...... 2,122 1, 304 2, 549 I, 239 2, 892 1,457 2,190 1,633 ...... Less than $I,000,000 ...... 276 506 646 564 571 453 295 2~ Listed stocks sold primarily over the counter 380 164 619 330 1,005 (’) (t) 183 (1) $1,000,000 and over ...... 1,853 (’) (’) 2, 375 Less than $1,6O0,6O0...... 229 161 477 330 499 (,) (,) 183 (,) lC Unlisted stocks sold over the counter ...... 324 262 324 659 825 226 483 371 443 1~ $1,000,000 and over ...... 1,950 (~) 4, 535 1,699 ...... 1,251 ...... Less than $1,6O0,6O0...... 26O 260 361 399 226 483 272 443 16

Insufficient number of items for a representative median. 1050 REPORT OF SPECIAL STUDY OF SECURITIES MARKETS 3 3

3 3

o ]052 REPORT OF SPECIAL STUDY OF SECURITIES MARKETS REPORT OF SPECIAL STUDY OF SECURITIES 1VIARKETS 1053 1054 REPORT OF SPECIAL STUDY OF SECURITIES I~ARKETS TABLE VIII-35.--Average size of transactions effected in new stock issues by selected institutions (by type of stock and type of institution, 1961)

Open-endinvestment All , Pension Life Nonlife companies Closed-end College Common Type of stock and transaction institutions funds insurance insurance investment endowmentFoundations trust funds companies companies companies funds Load No load

Preferred stock: Purchases in original offering: Number of shares: Median ...... 100 5O 100 100 100 ...... 50 I00 2,500 ...... Mean...... 845 111 1, 131 209 3, 475...... 52 292 2, 560 ...... Dollar amount: Median ...... 10, 000 2. 602 I0,000 7, 560 5, 200 ...... 5, 000 5, 200 250, 0~0 ...... Mean...... 49, 729 5, 782 56, 486 14, 612 344, 554 ...... 5, 250 17, 339 250, 600 ...... Purchases after original offering: N1~mberof shares: Median ...... 1,000 500 I,000 200 ...... 5,000 Mean ...... 913 ...... 933 87O 258 ...... 5, 000 Dollar amount: Median ...... 50, 187 ...... 50,625 100, 3Y5 20, 688 ...... 525, 000 Mean...... 92, 688 ...... 89, 504 87, 300 26, 717 ...... 525, 600 Sales after original offering: Number of shares: Median ...... 250 ...... ! ...... Mean...... 210 ...... 210 ...... Dollar amount: Median ...... 26, 688 ...... 26, 688 Mean...... 22, 415 ...... 22,415 :::::::::::::::::::::::::::::::::::::: Common stock: Purchases in original offering: Numberof shares: Median ...... 63 5O 160 50 160 650 1oo...... Mean...... 353 270 ...... 367 322 214 287 1, O40 906 ...... Dollar amount: Median ...... 1,800 1, 925 ...... 1, 500 1, i,400 2, 600 16, 400 Mean ...... 7, 372 5, 686 ...... 6, 371 7, 214 3,871 6, 660 64, 534 23, 544 ...... Purchases after original offering: Number of shares: Median ...... 560 500 ...... 50O 530 5 400 ...... 300 ...... Mean ...... 794 1,160 ...... 0~5 744 5 693 ...... 418 ...... Dollar amount: Median ...... 18, 7~0 23, 218...... 22, 583 21,060 149 12, 437 ...... s, 187 ...... Mean...... 25, 950 36, 6‘56 ...... 33, 372 26, 881 149 19,049 ...... 12, 306 ...... Sales after original offering: Numberof shares: Median ...... 2OO 100 ...... 4O5 400 300 Mean ...... 375 393 ...... 482 376 274 Dollar amount: Median ...... 7, 800 4, 135 ...... 15, 622 9, 0,50 8, 223 Mean...... 12, 681 14, 644 ...... 14,411 11,357 9, ‘569

No~.--See text for definition of"new issues." Figures in this table are based on data in table VIII-34. TABLE VIII-36.--Comparison of new stock issue purchases in original offering with purchases of the same issues after the original offering by the same institutions (by type of stock and type of institution, 1961)

0pen-end investment Life in- Nonlife companies Closed-end College Common Type of stock and transaction Total Pension surance insurance .. investment endowment Founda- trust funds funds companies companies companies funds tions Load No load

Preferred stock: Numberof funds ...... ,3 2 1 Purchases in original offering: Numberof shares ...... 104, 890 104, 440 450 Dollar amount ...... 2, 985, 000 2, 940, 000 45, 000 Purchases after original offering: Numberof shares ...... 2, 250 760 1,550 Dollar amount ...... 215, 925 55, 625 150, 300 Ratio of average price of post offering pur- chases to average offering price (percent) i.. 102. $ 10L1 ...... 103. 4 Commonstock: Numberof funds ...... 10 2 4 Purchases in original offering: Numberof shares...... 65, 625 11, 205 ...... 15,285 17,045 13, 940 ...... 8, 150 ...... Dollar amount ...... 1, 702, 762 336, 712 ...... 435,748 382,325 336, 077 ...... 211, 900 : ...... Purchases after original offering: Numberof shares ...... 262, 925 40, 605 ...... 4~ 855 110,055 58, 060 ...... 8, 350 ...... Dollar amount ...... 9, 259, 736 1, 474, 551 ...... 1, 713,401 3,978,402 1,847, 268 ...... 246, 114 ...... Ratio of average price of post offering pur- chases to averago offering price (percent) i.. 133.1 127. 6 ...... 134.7 149.0 112.6 ...... 113.4 ......

1 The ratio of the cost of the securities purchased after the offering to the cost if the NOTE.--Seetext for definition of "new issues." equivalent securities had been purchased at the original offering price. TABLE VIII-37.--Comparison of new stock issue purchases with later sales of the same issues by the same institutions (by type of stock and type of institution, 1961)

Open-endinvestment Life in- Nonllfe companies Closed-end College Common Type of stock and transaction Total Pension surance insurance ~, , ’investmentendowment Founda- trust funds funds companies companies companies funds tions Load No load

Preferred stock: Numberof funds ...... 2 2 Purchasesin originaloffering: Numberof shares ...... 630 630 Dollar amount ...... 63, 000 63, 000 Purchases after original offering: Numberof shares ...... Dollaramount ...... Salesafter original offering: Numberof shares...... 630 ...... 630 ...... Dollaramount ...... 67, 244...... 67, 244 ...... Ratioof averageprice for sales to theaverage offer- ing price (percent)~ ...... 106.7 ...... 106.7 ...... Sales within 40 days after offering: Numberof shares ...... Dollar amount ...... , ...... , ...... , ...... , ...... , ...... , ...... , ...... , ...... , ...... , ...... Sales wlthln 40 days as a porcent of all sales ...... Ratio ol average price for sales within 40 days to the average offering price (percent)l ...... ~ommon stock: Numberof funds ...... 7 ...... I ...... 1 2 3 ...... Purchases in original offering: Numberof shares ...... 14, 890 ...... 6, 900 ...... 1,930 4,140 1,920 ...... Dollar amotmt ...... 359, 311 ...... 195,221 ...... 34, 840 88, 880 40, 370 ...... Purchases after original offering: Numberof shares ...... , ...... Dollar amount ...... , ...... , ...... Salesafter original offering: Numberof shares...... 13,890 ...... 5, 900 1,930 4,140 I, 920 ...... Dollaramount ...... 469,212 ...... 219, 657 57, 645 124,927 66,983 ...... Ratioof averageprice for sales to theaverage offer- ingprice (percent) i ...... 146.2 ...... 140.2 165.4 140.6 165.9 ...... Saleswithin 40 daysafter offering: Numberof shares...... 8,645 ...... 655 1,930 4,140 1,920 ...... Dollaramount ...... 270,505 ...... , 20,950 57,645 124,927 66,983 ...... Sales within 40 days as a percent of all sales___ 62.2 ...... 11.1 100. 0 i00.0 100.0 ...... ~ ...... Ratio of average price for sales within 40 days to the average offering price (percent) 1 ...... 152.0 ...... 150. 9 165.4 140.6 165.9 ......

1 The ratio of the amount received for the securities sold to the value of the equivalent were purchased in 1961 and later sold by the same institution during the same calendar securities based on the original offering price. year. NaTl.--See text for definition of "new issues." The table covers only issues which TABLE VIII-38.--Relative change in use of the over-the-counter market for listed stocks during the past 5 years as esti,nated by selected institutions (by type of institution) [Based on reports in August 1962¯ Numberof funds in each category as percent of total]

Open-end investment Life in- Noniife companies Closed-end College Common Total Pension surance insurance investment endowmen~ Founda- trust funds funds companies companies companies funds tions Load No load

Listed preferred stocks ...... 100.0 100.0 100.0 100. 0 100. 0 100. 0 100. 0 100. 0 100. 0 100. Use of over-the-counter market increasing ...... 19.6 31.1 12. 5 20. 0 10. 0 33. Use of over-the-counter market decreasing ...... 6.3 4.4 15. 4 ...... 14.3 No change ...... 74. 1 64.5 88.9 87.5 76. 9 I00. 0 85.7 80.0 90.0 55. Listed public utility commonstocks ...... 100. 0 100. 0 100.0 100.0 100.0 I00.0 I00.0 100.0 100.0 100. Use of over-the-counter market increasing ...... 40. 7 66. 7 11.1 50.0 21.4 25.0 ...... 20.0 20.0 44. Use of over-the-counter market decreasing ...... 3.4 14. 3 25.0 ...... 10.0 ...... No change ...... 55.9 33.3 88.9 50.0 64.3 50.0 100.0 70. 0 80. 0 55. Other listed commonstocks ...... 100. 0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100. Use of over-the-counter market increasing ...... 43.3 78.3 22.2 50.0 20. 0 10.0 10. 0 44. Use of over-the-counter market decreasing ...... 4.2 20. 0 ...... 10.0 11. No change ...... 52. 5 ...... ~:~...... ÷~:~...... ~5:5" 60. 0 100.0 100.0 90.0 80. 0 44.

TABLE VII 1-39.--Number of broker-dealers used and commissions received by broker-dealers from selected institutions (by type of institution, 1961)

0pen-end investment Pension Life Nonlife companies Closed-end College ComHlon Tota] funds insurance insurance investment endowment Foundations trust funds companies companies companies funds Load No load

~alue of stock portfolio ~ (thousand dollars) ...... 22, 073, 851 5, 097, 904 2, 872, 889 1,868, 399 6, 999, 684 335, 699 1,077, 645 1,313,820 2, 061,849 446,462 Dross commissions paid (thousand dollars) ...... 41,692 4,468 3, 470 2, 368 23, 928 1, 577 2, 729 1,674 1,081 447 Dross commissionsas percent of stock portfolio ...... 2 .1 .1 .1 .3 .5 .3 .i .1 .1 Hve-ups paid (thousand dollars) ...... 3, 332 ...... 273 21 2, 964 12 62 Hve-ups paid as percent of gross commissions ...... 7.9 .9 12.4 .8 2.3 .verage number of broker-dealers used per fund ...... 84 72 73 70 251 45 53 53 20 46 Iumber of broker-dealers used per million dollars of stock portfolio ...... 66 .25 .34 ¯ 57 .68 .34 ¯ 41 .12 .90 .4~

~ Figures are averages of beginning and end of year portfolio holdings. They differ NO~E.--See question 8 of Questionnaire IN-4, app. A. for definitions of gross com- from figures in table VIII-a for this reason and aiso as a result of excinding from the above missions and give-ups. The commissions shown are those paid in connection with figures portfolio holdings of 2 institutions whose data were not usable for this table. portfolio transactions in stocks only. REPORT OF SPECIAL STUDY OF SECURITIES MARKETS 1059

TA~ VIII-40.--Gommissions received by leading broker-dealers ~rom selected instiSutio’ns by exchange membe~’ship status (1961)

Gross Give-ups Give-ups I Net commissions received paid I commissions A. Dollar amount (thousands)

Total ...... 41, 692 3, 382 3,332 41,692 Top 20 broker-dealers: i New York members__. 28, 461 602 2, 758 26, 305 Other exchange members ...... 492 30 101 421 Nonmemberfirms ...... 743 19 69 693 Other tha~ top 20 broker-dealers ~ ...... 11,998 2,680 404 14,274

B. Percent of total

Total ...... 100.0 100.0 100.0 100. 0 Top 20 broker-dealers: 1 New York Stock Exohange members___ 68.2 18.1 82. 8 Other exchange members ...... 1.2 .9 3.0 1.0 Nonmemberfir. ms ...... 1.8 .6 2.1 1.7 Other than top 20 broker-dealers ~ ...... 28.8 80.4 12.1 34.2

i Refers to the 20 broker-dealers receiving the largest commissions from each respondent. Figures for a single broker-dealer may therefore appear in the top 20 reported by 1 respondent and the "Other" cate- gory for other respondents. s Identification of individual firms other than the 20 receiving the largest commissions was not requested from respondents. NoTv..--See question 8 of Questionnaire IN-4, app. A, for definitions of gross commissions, give-ups, and net commissions. The commissions shown are those paid In connection with portfolio transactions in stocks only. Figures may not add to totals because of rounding. TABLE VIII-41.--Concentration of commissions received by leading broker-dealers from selected institutions (by type of institution, 1961)

Open-end investment Pension Life companies Closed-end College Common Quartile rank of broker-dealers Total funds insurance insurance investment endowment Foundations trust funds companies companies companies funds Load I No load

A. Dollar amount (thousands)

Gross commissions ...... 41,692 4, 468 3, 470 2, 368 23, 928 1,577 2, 729 1,674 1,031 447 1st five ...... 18, 602 1,844 2, 125 1, 336 9, 435 1,031 1,642 516 499 174 2d five ...... 5, 173 756 329 235 2, 947 138 248 297 150 73 3d five ...... 3, 451 456 238 173 1,956 95 166 213 108 46 4th five ...... 2, 469 310 162 125 1, 404 75 131 151 77 34 Others ...... 11,997 1,102 616 499 8, 186 238 542 497 197 120 Give-ups received ...... 3, 332 ...... 273 21 2, 064 12 62 ...... 1st five ...... 238 ...... 22 ...... 178 (2) 36 ...... 2d five ...... 164 ...... 21 3 139 ...... 1 ...... 3d five...... 156 ...... 18 2 136...... 4thfive ...... 95 ...... 27 2 66 (~) ...... Others ...... 2, 681 ...... 185 14 2, 445 ...... Give-ups paid ...... 3, 332 ...... 273 21 2, 964 12 62 ...... istfive ...... 2, 210...... 266 17 I,864 7 56 ...... 2d five...... 406 ...... 3 ...... 402 ...... I ...... 3d five ...... 214 ...... 1 3 208 1 1 ...... 4th five ...... 97 ...... 1 ...... 95 1 Others ...... 2 1 395 3 Net commissions ...... 41,692 4, 468 3, 470 2, 368 23, 928 1,577 2, 729 1, 674 1,031 447 1st five ...... 16, 627 1,844 1,881 1,319 7, 749 1,024 1,622 516 499 174 2d five ...... 4, 031 756 347 238 2, 68’4 138 248 297 150 73 3d five ...... 3, 395 456 255 172 1,884 94 165 213 108 46 4th five ...... 2, 466 310 188 127 I, 375 74 131 151 77 34 Others ...... 14, 273 I, 102 799 512 10, 236 247 563 497 197 120 REPORT OF SPECIAL STUDY OF SECURITIES MARKETS 1061 1062 REPORT OF SPECIAL STUDY OF SECURITIES MARKETS REPORT OF SPECIAL STUDY OF SECURITIES ~IARKETS 1063

’TABL~ VIII-43.--Estimate of over-the-cou~vter sales of NYSE stoc~cs (1961)

Shares Value (thousands) (millions)

Sales reported by 33 firms in sample~ ...... 29, 062 $1, 345.9 Adjustmentto include public sales to broker-dealers ss principal and exclude duplications where one broker acted as agent for another broker ~ ...... 2, 906 134.6 Increase for nonreportingfirms ~ ...... 10, 656 493. 5 Total estimated sales ...... 42, 624 I, 974.0 I Excludes stocks on exchange’sexempt list. ~ Excludes 4 firms which were sent Questionnaire OTC-6but which started trading over the counter in 1962. Includes sales reported by the firms for their ownaccount as principal and for the account of others as agent. ~ Estimatedat 10 percent on basis of San. 18, 1962sales. ~ It was estimated that the 33 firms in the samplewere responsible for 75 percent of the trading. This was based ou their proportion of trading on $an. 18, 1962, as shownin Questionnaire OTC-3which covered all broker-dealers.

TABLE VIII-44.--Over-the-countcr sales of NYSE stocks compared with total over-the-counter sales and w4th total sales on the 1VYSE (1961)

Shares Value (millions) (billions)

1. Estimated OTCsales of NYSEstocks ~ ...... 43 $2.0 2. EstimatedOTO., sales of all stocks ...... 2, 500 $38.9 3. NYSEstocks as percent of all stocks (1) ÷ (2) ...... 1.7 5.1 4. Total stock sales on NYSE...... 1, 292 $52.7 5. OTCsales of NYSEstocks as percent of Exchange sales of NYSE stocks (1) + (4) ...... 3.3 3.8

i Excludingsales of stocks on the Exchange’sexempt list.

TABLE VIII-45.--Distribution of NYSE commo~ stocks by n.umber of over-the- counter1 markets made (1961) Number of Number of Number of markets made: stocks Number of markets made: stocks 1 ...... 90 7 ...... 2 2 ...... 56 3 ...... 49 4 ...... 36 Total number of stocks ..... 270 5 ...... 22 Total number of markets for 6 ...... 14 all stocks ...... 712 All stocks reported by 13 registered broker-dealers who made markets in these stocks; of the 13 firms made a to.tal of only 4 markets. TABLEVIII--46.--Number of NYSE stocks [or which markets were made by 7 largest market makers (1955, 1961, and 1965) ~

Sanuary to September 1962 1955 1961 Additions Discon- tinuances

Firm A ...... 76 9 ~ B ...... 105 161 C ...... 41 53 115 7 41 3 72 25 1] G ...... 68 7O 13 ~

~ Through September 1962. Stocks shownin 1955 and 1961 include those for which OTCmarkets were madeduring any part of the year. 1064 REPORT OF SPECIAL STUDY OF SECURITIES MARKETS T~BLE VlII-47.--Number of markets made by broker-dealers in sample of NYSE stocks (1961) Number Number S~ocl~~ marke~s ~tock 2 marl~e$s Alleghany Corp ...... 2 American Radiator ...... 1 Allegheny Power System ...... 3 American Smelting ...... Allied Chemical ...... 3 American Telephone & Telegraph_ 8 Allied Stores ...... American Tobacco Co___ 4 Allis Chalmers 3 A~nerican Viscose Corp ...... 2 Aluminium, Ltd 3 Ampex Corp ...... 2 Aluminum Corp. of America ...... Anaconda Wire & Cable Co ...... 4 American Airlines ...... 3 Arizona Public Service ...... 4 American Can Co ...... 5 Armco Steel Corp ...... 2 American Cyanamid Co ...... 4 Atchison, Topeka & Sante Fe Ry. American Electric Power ...... 4 American Machine & Foundry ...... 2 Atlantic Refining 4 American Metal Climax ...... 1 Atlas Corp ...... 1 American Motors ...... 5 Avco Corp ...... Amerada Petroleum ...... 1: x Sample was selected by taking all stocks with initial "A." Broker-dealers include 13 firms whomade markets in these stocks. 2 Commonor capital stock. Stocks shown include those for which OTCmarkets were madeduring any part of the year. TABLEVIII-48.--Distribution of NYSE common stocks traded over the counter by volume on the NYSE ~ Round-lot share Number o~ Round-lot share Number of volume on NYSE stocks volume on NYSE stocks Total ...... 270 800,000 to 999,999___ 23 1,000,000 to 1,999,999 8.1 Less than 200,000 13 2,000,000 to 2,999,999 37 200,000 to 399,999 ...... 24 3,000,000 to 3,999,999 16 400,000 to 599,999. 26 4,000,000 to 4,999,999 9 600,000 to 799,999 ...... 24 5,000,000 and over__ 17 All stocks reported by 13 registered broker-dealers who made markets in these stocks. REPORT OF SPECIAL STUDY OF SECURITIES MARKETS 1065

TABLZ VIII-49.--D~str~bution of all NYSE commo~ stocks and XYSE common stocks traded over the counter by number ol shareholders, number ol shares outstanding, market value o[ shares ou.tstanc~ing, an~ a~sets o[ issuer (end ol 1961 ) [_As percent of all stocks In category]

NYSE NYSE All NYSE common All NYSE common common stocks common stocks stocks traded stocks traded OTO ~ OTG 1

SHAREHOLDERS MARKETVALUE (THOUSANDDOLLARS) Total ...... 100. 0 100. 0 Total 100. 0 100. Under2,000 ...... {}.8 ...... 2,000to 2,999...... 7.7 ...... Under10,000 ...... 6.6 ~.000 to 4,999 ...... 17.0 .8 10,000to 24,999 12.6 5,000 to 9,999 ...... 24.1 2.2 25,000 to 49,999 ...... 17. o 3: { I0,000 to 24,999 ...... 25.3 29.6 50,000 to 99,999 ...... 25,000 and over ...... 19. 1 67. 4 100,000 to 499,999 ...... 31. 3 41. ~ 500,000and over ...... 15. 4 49. ~ Range of central two- thirds of stocks s (num- Range of central two- ber of shareholders) ..... 3, 310- 17, 672- thirdsof stocks~ (mar- 28, 605 94, 445 ket valuein thousands). $22,120- $137, 466- Ratio of range to NYSE $460,156 $I, 32I, 47~ listing requirements 2. 21-19. 20 11.78-62. 96 Ratio of range to NYSE listing requirements 2. 21-46. 00 13.74-132.14 SIIARES OUTSTANDING (THOUSANDS) ASSETS {THOUSAND DOLLARS) Total ...... 100. 0 100. 0 Total ...... 100. 0 150. C Under 1,000 ...... 16.5 .4 i,000 to 1,499...... 13.9 .7 Under 30,000 ...... 19.7 .4 l,~0 to 2,499 ...... 18.8 4.4 30,000 to 49,999 ...... 12.3 .7 5,500 to 4,999 ...... 21.6 13.0 50,000 to 99,999 ...... 19.0 3. C 5,000 to 9,999 ...... 13.9 30. 4 100,000 to 499,999 ...... 34. 0 43. 3 I0,000and over ...... 15. 3 51.1 500,000 to999,999 ...... 8.5 28.~ 1,000,000 and over ...... 6.5 23.7 Range of central two- thirdsof stockss (num- Range of central two- ber of sharesoutstand- thirds of stocks ~ (assets ingin thousands)...... 1,000- 4, 700- in thousands) ...... $26,000- $206, ~ 9,101 26, 050 $440,.000 $I, 287, O~ Ratio of range to NYSE Ratio of rsnge to NYSE listingroquirements s.__ 2. 00-18. 2O 9. 40-52. I0 listing requirements s___ 2.60-44.00 20. 60-128.7C

~ Based on 270 stocks reported by 13 registered broker-dealers who made markets in these stocks. s Central two-thirds excludes one-sixth of the stocks at each extreme. ~ It should be noted that NYSErequirements refer to shares outstanding exclusive of concentrated or family holdings rather than the total used here; to shareholders of over I00 shares rather than all shareholders as used here; and to net tangible assets rather than the total asset figures used here. 1066 REPORT OF SPECIAL STUDY OF SECURITIES MARKETS

TABLE VIII-5Oa.--Transactions in NYSE stocks purchased and sold over thc counter by 7 largest market makers, classifiec~ by size of transaet~ (weeks ended1 Mar. 2~, 1961, Jan. 19 and June 1, 1962)

Size of transaction (shares) Alltrans- actions I Less than 100 to 299 300 to 499 500 to 999 1,000 to ] 2,000 and 100 1,999] over

Number of transactions

Total ...... 7,180 5,297 1,460 157 161 75 30 Firm A ...... 153 61 49 12 21 9 1 Firm B ...... 1,435 1,206 220 8 1 Firm C ...... 738 408 256 27 31 10 6 Firm D ...... 76 25 23 5 12 6 5 Firm E ...... 781 472 252 27 2O 9 Firm F ...... 551 333 146 26 26 12 8 Firm O ...... 3, 446 2, 792 514 52 50 29 9

Percent of all transactions

Total ...... 100.0 73. 8 2.2 2.2 1.1 .4 Firm A ...... 100.0 39.9 32.0 7.8 13. 7 5.9 .7 Firm B ...... 100. 0 84.0 15. 3 .6 .1 Firm C ...... 100. 0 55. 3 34. 7 3.6 4.2 1.4 .8 Firm D ...... 100.0 32. 9 30.2 6.6 15. 8 7.9 6.6 Firm E ...... 100. 0 60. 4 32. 3 3.4 2.6 1.2 .1 Firm F ...... 100. 0 60. 4 26. 5 4.7 4.7 2.2 1.5 Firm G ...... 100. 0 81.0 14. 9 1.5 1.5 .8 .3

1 Includes transactions in selected stocks reported on Questionnaire OTC-6 in which the firms did not make markets, as well as those in which they did; includes purchases and sales for their own account and for the account of others.

TABLEVIII-5Ob.--SIu~res of NYSE stocks purchased and sold over the counter by 7 largest market makers, classified by size ol~ transaction (weeks ended Mar. 2~,1 1961, Jan. 19, and June 1, 1962)

Size of transaction (shares) All trans- actions

Lessthanl100 100to299 I 300to499 l 500to999 I 1,000to1,999 ]2,000andover

Number of shares

Total ...... 678, 079 126, 653 183, 459 51, 908 94, 319 83, 600 138,140 Firm A ...... 3~525 2. 026 6, 504 3, 872 11, 223 10, 900 5, 000 Firm B ...... 57,550 29, 229 25, 087 2, 734 50O Firm C ...... 131,721 10, 413 32. 676 8, 807 18, 775 10, 250 50, 800 Firm D ...... 52,560 923 3, 222 1,900 6, 815 6, 700 33,000 Firm E ...... 77,170 13,853 31,162 8, 975 11, 180 10, 000 2, 000 Firm F ...... 83,381 8, 556 18, 975 8, 171 15, 879 12, 200 19, 600 Firm G ...... 23~ 172 61, 653 65, 833 17, 449 29, 947 33, 550 27, 740

Percent of all shares

Total ...... 100. 0 18. 7 27.0 7.7 13.9 12. 3 20. 4 Firm A ...... 100. 0 5.1 16. 5 9.8 28. 4 27. 6 12.6 Firm B ...... 100.0 50.8 43.6 4.7 .9 Firm C ...... 100. 0 7.9 24. 8 6.7 14. 2 7.8 38. 6 Firm D ...... 100.0 1.8 6.1 3.6 13.0 12. 7 62.1 Firm E ...... 100. 0 17.9 40.4 11.6 14. 5 13.0 2. 6 Firm F ...... 100. 0 10. 3 22. 8 9.8 19. 0 14. 6 23.5 Firm G ...... 100. 0 26. 1 27. 9 7.4 12. 7 14. 2 11.7

t Includes transactions in selected stocks reported on Questionnaire OTC-6in which the firms did not make markets, as well as those in which they did; includes purchases and sales for their own account and for the account of others. REPORT OF SPECIAL STUDY OF SECURITIES MARKETS 1067 1068 REPORT OF SPECIAL STUDY OF SECURITIES ~VIARKETS

TABLE VIII-52.--Trading by institutions in NYSE stocks over the counter and in aH ma,rkets ( Mwrch 1961 and April 1962) [Dollars in thousands]

March 1961 April1962

TyImof institution Trading OTC trad- Trading : OTCtrad- in all Trading ing as per- in all Trading ing as per- markets OTC cent of all markets OTC cent of all trading trading

Total...... $383, 805 $39,315 10. 2 $323,872 $30,901 9.5 Pensionfunds ...... 61, 520 11, 513 18. 7 52, 286 8, 216 15 7 Lifeinsurance companies ..... 27, 585 2, 916 10. 6 21, 780 3. 583 16.4 Nonlife insurance eoml~nies__ 25, 139 7, 953 31.6 24, 076 1, 722 7.~ Open-end investment compa- nies: Load ...... 172, 755 10, 392 6.0 153, 596 9, 365 6. No load ...... 19, 292 307 1.6 15, 953 260 1. Closed-endinvestment com- panies...... 34, 664 3, 515 10. 1 22, 790 1, 525 6. Collegeendowment funds ..... 29, 304 1, 091 3.7 11, 545 4, 286 37. Foundations...... 9, O33 652 7.2 15, 315 854 5. Commontrust funds...... 4, 513 976 21.6 6, 531 1, 090 16.

Source: Questionnaire IN-4.

TABLE VIII-53a.--Transactions i~ NYSE stocks purchased and sold over the counter by 7 largest market makers, classified by type of customer (weeks ended Mar. 24, 1961, Jan. 19 and June 1, 1962)

Type of customer

All Institutions trans- actions Broker- Indi- dealers viduals Invest- I Non- Pen- Total Banks men~ ] finan- sion com- i cial funds Parties’[

Number of transactions

Total ...... 7, 180 5, 457 2O9 1, 514 FirmA ...... 153 78 11 64 45 I 5 FirmB ...... 1, 435 1,391 7 37 37 [ ...... FirmC ...... 738 464 158 116 FirmD ...... 76 46 13 17 FirmE ...... 781 760 6 15 Firm F ...... 551 466 4 81 Firm G ...... 3, 446 2, 252 10 1,184 1,139 { 6

Percent of all transactions

Total ...... 100.0 76. 0 2.9 21.1 19. 7 .2 1.ol .I .I FirmA ...... 100. 0 50.9 7.2 41.9 29. 4 5.9 1.3 2.0 FirmB ...... 100.0 96.9 .5 2.6 2.6 FirmC ...... 100. 0 62. 9 21.4 15.7 14. 1 .... i?~-:::::::: FinnD ...... 100. 0 60. 5 17. 1 22. 4 10. 6 1.3 6.6 ...... FirmE ...... 100. 0 97. 3 .8 1.9 1.6 FirmF ...... 100. 0 84. 6 .7 14. 7 12. 9 Firm O ...... 100. 0 65. 4 .3 34. 3 33. 0 .9 .i .I

I Includes transactions in selected stocks reported on Questionnaire OTC-6 in which the firms did not make markets, as well as those in which they did; includes purchases and sales for their own account and for the aceountof others. ~ Incindes mutuaLfunds. REPORT OF SPECIAL STUDY OF SECURITIES ~J~RKETS 1069

TABLE VIII-5~b.--Shares of NYSE stocks purchased and so~d over the counter by 7 l~rgest market makers, classified by type of customer (weeks ended Mar. 24, 1961, Jan. 19 and June 1, 1962)

Type of customer

Institutions All Broker- Indi- l---- shares dealers viduals Invest- Total Banks Insurance merit Non- Pension com- ] financial funds panics 2

Number of shares

Total ...... 678, 079 412, 357 36, 063 229, 659 129, 929 24, 667 [ 61, 463 9, 650 3, 950 FirmA ...... 39, 525 12, 627 592 26, 306(’ 11, 382 3, 500 8, 724 700 2, (DO FirmB ...... 57, 550 54, 629 494 2, 427I 2, 427 FirmC ...... 131, 721 78, 921 20, 570 32, 230~ 6, 937 ...... 25, 293 FirmD ...... 52, 560 13, 054 13, 652 25, 854I 1,854 14, 200 2, 000 7, 800 ...... FirmE ...... 77,170 71,945 213 5, 012I 3,912 1,100 Firm F ...... 83, 381 54,942 208 28, 231 15, 080 ~::::::_-:_-:13,151 Firm G ...... 236,172 126, 239 334 109, 599 88, 337 6,967 11,195 I, 150 1,950

Percent of all shares

Total ...... 100. 0 60. 8 5.3 33.9 16.2 9.1 1.4 .6 3.~6 Firm A ...... 100.0 31.9 1.5 66.6 28.8 8.8 22. 1 1.8 5.1 Firm B ...... 100.0 94. 9 .9 4.2 4.2 ...... Fi~m C ...... 100.0 59. 9 15.6 24. 5 5o31 ...... 19. 2 Firm D ...... 100.0 24. 8 26. 1 49. 1 3. 5 27.0 3.8 14. 8 ...... Firm E ...... 100.0 93. 2 .3 6.5 5.1 ...... 1.4 Firm F ...... 100.0 65. 9 .2 33.9 18.1 I ...... 15.8 Firm G ...... 100.0 53.5 .1 46. 4 37.4. 3.0 4.7 .5 ’ .8

t Includes transactions in selected stocks reported on Questionnaire OTC-6 in which the firms did not make markets, as well as those in which they did; includes purchases and sales for their owa account and for the account of others. 2 Includes mutual funds.

TABLE VIII-54.--Dollar volume of exchange stocks and of all stocks purchased and sold over the counter by 7 largest market makers (Jan. 18, 1962) ~ [Dollars in thousands]

Exchange All stocks Exchange Over-the- stocks as stocks counter percent of stocks all stocks

Firm A ...... $1, 103 $672 $431 60.9 Firm B ...... 639 630 9 98.6 Firm C ...... 9, 953 2,233 7, 720 22.4 Firm D ...... 3,884 700 3,184 18.0 Firm E ...... 1,099 1,095 4 99. 6 Firm F ...... 1,601 959 642 59. 9 Firm G ...... 4, 887 4,554 333 93.2

1 Includes transactions in stocks in which the firms did not make markets as well as those in which they did, and includes purchases and sales for their own account and for the account of others. Source: Questionnaire OTC-3. 1070 REPORT OF SPECIAL STUDY OF SECURITIES MARKETS

TABLE VIII-55,--Volume of 2VYSE stocks purchased and sold over the counter by 7 largest market makers with each other (weeks ended Mar. ~4, 1961, Jan. 19 and June 1, 1962} 1

Ratio of Shares traded shares traded with other Total shares with other market traded OTC market makers makers to total shares traded

All firms ...... 49, 783 678, 079 7.3 Firm A ...... 3, 996 39, 525 10. 1 Firm B ...... 392 57, 550 .7 Firm C ...... 16, 834 131,721 12. 8 Firm D ...... 4, 599 52, 560 8.8 Firm E ...... 9, 326 77, 170 12.1 Firm F ...... 4, 533 83, 381 5.4 Firm O ...... 10,103 236, 172 4.3

~ Includes transactions in selected stocks reported on Questionnaire OTC-6 in which the firms did not make markets, as well as those in which they did; includes purchases and sales for their own account and for the account of others. Since the 7 firms did not report on the same stocks, many of the transactions appear only in 1 firm’s figures. Where 2 or more firms reported on the same stock, the transaction appears in totals of each. 2 Includes a 10,000-share transaction.

TABLE VIII-56.--Dollar volume of NYSE stocks so~d over the counter as princi- pal and agent by 7 largest market makers (1961) ~

[Amounts in millions of dollars]

Total Principal Agent

Amount Percent of Amount Percent of Amount Percent of total total total

All firms ...... I, 008. 2 100. 940.9 93.3 67. 3 6.7 Firm A ...... 63. 2 100. 45. 2 71.5 18. 0 28.5 Firm B ...... 85.1 100. 84.5 99.3 .6 .7 Firm C ...... 100.1 100. 86.0 85.9 14.1 14. 1 Firm D ...... 47.9 100.0 36. 4 76. 0 11.5 24. 0 Firm E ...... 91.2 100. 90.7 99.5 .5 Firm F ...... 182. 7 100. 182.0 99.6 .7 .4 Firm O ...... 438. 0 100. 416.1 95. 0 21.9 25.0

t Includes transactions in stocks In which the firms did not make markets as well as those in which they did. 2 Estimated by respondents.

TABLE VIII-57.--Ratio of over-the-counter trading to inventory in NYSE stocks by 7 largest market makers (1961)

[Doliars in thousands]

Aggregate Ratio of reported Average inventory trading daily sales to average inventory daily sales

T~m~8 Firm A ...... $1, 251 $181 6.9 Firm B ...... 746 338 2.2 Firm C ...... 941 344 2.7 Firm D ...... 1,825 146 12.5 Firm E ...... 456 363 1.3 Firm F ...... 2, 721 728 3.7 Firm G ...... 11, 534 1,664 6.9

~ Includes only stocks in which markets were made. Volume of sales in 1961 from Questionnaire OTC-6 ; security position from annual broker-dealer financial reports to Commission,filed as of tune 30, 1961, for 5 firms, Oct. 31 and Dec. 31~ 1961, for the other 2. ~ Includes sales by broker-dealers for their own account and for the account of others, REPORT OF SPECIAL STUDY 0g gECURITIES MARKETS 1071

TABLE VIII-58.--Over-thv-counter purchases and sales and e~osing inventor,lea ol largest market makers in 3 NYSB stocks (week, ended Mar. 25, 1961, Jan. 19 andx June 1, 1965) [Numberof shares]

Total Closing inventory on-- Ratio of !purchases Average Average inventory Security and firm ~ and sales daily daily to in 3 volume Mar. 24, :~an. 19~ :~une 1, inventory volume weeks s 1961 1962 1962 (daily average)

American Telephone & Tele- graph (112~) Times Firm A ...... 2, 533 181 3,488 S 62 0 1,183 6. 5 Firm B ...... 12,307 879 554 114 S 1,291 S 653 .7 Firm G ...... 17, 094 1,221 434 161 S 491 362 .3 Firm E ...... 9, 225 659 67 160 S 60 96 .1 Firm F ...... 12,956 925 57 S 401 957 S 472 .5 Firm O ...... 52, 945 3,782 633 446 337 472 .1 Total ...... i 107, 060 7, 647 5,233 * 1,344 * 3,136 * 3,238 .4 Standard Oil of New 5er~y (46¼) Firm A ...... 8,353 597 130 S 538 ...... 223 .4 Firm B ...... 6, 902 493 115 S 213 24 117 .2 Firm E ...... 17,114 1,223 242 46 268 185 .2 Firm F ...... 11,554 825 4~211 S 2,914 59 2, 395 2.9 Firm O ...... 42, 733 3, 052 2,375 S 4,528 3,710 S 3, 538 1.2 Total ...... ~ 86, 65~ 6,190 7,073 * 8,239 * 4,061 * 6, 458 1.0 General Telephone and Elec- tronics (29~/~) s Firm B ...... 6, 389 456 910 S 108 S 577 S 532 1.2 Firm E ...... 8, 453 604 172 S 205 548 S 308 .5 Firm F ...... 11,503 822 587 S 338 2,454 S 1,126 1.4 Firing ...... 19,437 1,388 462 S 363 1,293 S 706 .5 Total ...... ~ 45, 782 3,270 2,131 * 1,014 * 4,872 * 2, 672 .8

* Aggregate of long and short positions. ~ Includes those market makers among the 7 largest who made markets in these stocks during period covered. ~ Includes purchases and sales by broker-dealers for their own account and for the account of others. a Closing prices, Mar. 19, 1961. ~26.9 percent of shares in transactions of 300 shares or more, including 5 transactions totaling 7,000 sharcs. ~52.1 percent of shares in transactions of 300 shares or over, including 2 transactions totaling 5,000 shares. ~43.6 percent of shares in transactions of 300 shares or more, 3 in transactions totaling 6,000 shares.

TABLE VI[I-59.--Purchases and sales on exchange and over the counter by 7 largest market makers in NYSE stocks in which they made markets (weeks ended Mar. $4, 1961, Jan. 19 and June 1,196~) ~

Exchange volume Over-the-counter volume Share volume on exchange as percent Number of Number of Number of Number of of OTC transactions shares transactions shares volume

Total ...... 166 29, 873 6,800 615,812 4.8 Firm A ...... 10 1, 900 150 39,020 4.9 Firm B ...... 70 8, 380 1,435 57,550 14. 6 Firm C ...... 54 7, 738 382 97,593 7.9 Firm D ...... 4 1,300 55 24,926 5.2 Firm E ...... 7 1, 800 781 77,170 2.3 Firm F ...... 3 1,800 551 83,381 2.2 Firm G ...... 18 6, 995 3,446 236,172 2.9

Includes transactions in selected stocks reported on Questionnaire OTC-6and only those stocks in which he firms made markets; includes purchases and sales for their o~vn account and for the account of others 1072 REPORT OF SPECIAL STUDY OF SECURITIES 1VIARKETS

TABLE VIII-60.--Ratio of over-the-counter sales to exchange sales in the same stock classified by industry of issuer and by 1VYSE activity of stock (for ~70 common stocks listed on the New York Stock Exchange, 1961 ) [Number of stocks]

Industry Volume on NYSE Ratio of over-the-counter re- ported sales to round-lot All stocks sales on the NYSE(percent) Utfllty Railroad Other Less than 600,000 stocks stocks stocks 600,000 , shares and shares over

Total...... 270 82 18 170 63 2O7 ).1 to 2.5 ...... 119 8 15 96 12 L6 to 5.0 ...... 61 14 2 45 13 4~ i.l to 10.0 ...... 47 22 1 24 16 31 10.1 to 15.0 ...... 24 20 ...... 4 12 12 [5.1 to 20.0 ...... 12 11 ...... 1 6 ~0.1 to 25.0 ...... 2 2 Over 25.0 ...... 5 5 1

i Over-the-counter sales reported by 13 registered broker-dealers for all commonstocks in which they made markets. It is estimated that these broker-dealers accounted for approximately 65 percent of the volume of over-the-counter trading in NYSEstocks. Includes sales by broker-dealers for their own account and for the account of others.

TABLE VIII-61.--Volume and value of stock tra~ling o’r# atl stock exchanges in the United ~tatcs (1962)

Volume of sales Value of sales

Exchange Percent Percent Number of of regis- Amount Percent of regis- shares tered (dollars) of all tered exchanges regional ~xc~hanges regional ~xchange~ exchanges

All exchanges ...... 1, 711,885, 933 54, 855, 289, 200 1DO.D0

Registered regional exchanges

Total...... 145, 342, 440 8. 49 3, 744, 307,054 1DO.00 Boston ...... 5, 361, 219 ¯ 31 3. 69 252, 353, 782 ¯ 46 6. 74 ...... 797,146 ¯ 05 .55 38, 459, 615 ¯ 07 1.03 ...... 6, 221,565 .36 4. 28 230, 012, 577 ¯ 42 6. 14 Midwest ...... 40, 125, 726 2. 34 27. 61 I, 511, 860, 092 2.76 40. 38 National 1 ...... 224, 961 .01 .16 509, 049 (~) ¯ 01 Pacific Coast ...... 50, 565. 911 2.95 34. 79 1,097, 208, 446 2.00 29.30 Philadelphia- ...... 14, 919, 065 .87 10. 26 577,177,534 1.05 15. 41 ...... 772, 780 .05 .53 30, 972, 353 .06 .83 Salt Lake ...... 10, 572, 392 .62 7. 27 1,732, 669 (2) .05 San Francisco Mining ...... 11,398, 788 . 67 7. 84 1,318, 621 (~) ¯ 04 S pc k ane ...... 4,382, 887 .26 3.02 2, 702, 316 .01 ¯ 07

Exempt regional exchanges

Total ...... 1,342, 495 .07] ...... 21, 030, 735 ColoradoSprings ...... 414, 74,81o ...... 904, 055 19, 939, 980 Richmond ...... lO,615 (2)"05 :-_-::--:-_: 640,~oo Wheeling ...... 13, 557 (2) I ...... 375, 545

Principalexchanges

American ...... 344, 346, 772 ] 20.12 81__~___~______._ NewYork ...... 1,220,854, 226 71.32 _-_-:::_-:_-:’_ 47,353,333,323 866:32 I 3, 736, 618, 488 [ 1 Although the National Stock Exchange is included as a regional exchange on this table, for purposes of this part it is not considered a regional exchange. ~ Less than .005 percent. Novz.--Annual sales, including stocks, warrants and rights, as reported by all U.S. exchanges to the Commission. REPORT OF SPECIAL STUDY OF SECURITIES 1VIARKETS 1073

TABLE VIII-62.--t~egional e~changes’ common stock lLsti~gs transferreg to New York e~changes (1955-61)

To-- Sourc~-- Totaloriglna Year Regional listingson exchanges American New York New York Stock Stock exchanges s Exchange Exchange

1956 ...... l0 7 3 8 1956 ...... 5 4 1 1957 ...... 8 3 5 8 1958 ...... 5 4 1 4 1959 ...... 10 5 5 9 1960 ...... 8 4 4 15 1961 ...... 8 3 5 15 Total ...... 3O 24 7O

i Excludes stocks which may have listed on the NewYork exchanges within a few weeks after their listing on a regional exchange. 2 Original listings include commonstocks of companies with preferred stock previously listed. They do not include commonstocks of companies which were successors to companies ~ hich already had common stocks listed but do include successors to companies whose stocks had unlisted trading privileges on the American Stock Exchange. Noz~..--All of the stocks of regional exchanges which were subsequently listed on the NewYork Stock Ex, change remained available for trading on the regional exchange. However, 1 such issue was delisted from the regional exchange but the stock was immediately admitted to unlisted trading privileges. Only 1 of the stocks which was listed on a regional exchange prior to being listed on the American Stock Exchange failed to remain on the regional exchange. Two other issues were changed from a listed to an unlisted status on the regional exchange some time after they were listed on the Amex. 1074 REPORT OF SPECIAL STUDY OF SECURITIES MARKETS REPORT OF SPECIAL STUDY OF SECURITIES /YIARKETS 1075

’ I 1076 REPORT OF SPECIAL STUDY OF SECURITIES IVIARKETS REPORT OF SPECIAL STUDY OF SECURITIES I~IARKETS 1077 1078 REPORT OF SPECIAL STUDY OF SECURITIES I~ARKETS

TABLE VIII-65.--Dollar volume of trading in region~I-o~ly stoel~s as percent of total dollar volume on regional stock exchanges (1958 and 1961)

Exhale 1948 1961 Exchange 1948: 1961

Boston ...... 7.0 5.2 Salt Lake ...... 85. 4 94. 3 Cincinnati ...... 22.0 13.4 San Francisco Mining ...... 99.0 99.9 Detroit ...... 9.4 4.8 Spokane ...... 81.9 46.1 Midwest ...... 16.9 6.5 Pacific Coast ...... 22.6 11.4 Total, mining exchanges ...... 85. 7 74. ~ Philadelphia-Baltimore-Washington.. 4.7 1.2 Pittsburgh ...... 17. 4 9.5 Total, all registered regional Board of Trade ...... exchanges ...... 15.7 7.~ Total, excluding mining ex- changes ...... 15.3 7.0

I Figures for predecessor exchanges are included in totals of merged exchanges.

TABLE VIII-66.--Al~liatio~s of regional exchange menvber firms with the New York and American Stock Exchanges (June 30, 196~)

Number of member firms of Number of regional exchange and-- member Total Regional e~change membership firms number el solely of member NYSE Amex i NYSE and regional firms Amex 1 exchanges

All regional exchange member firms__ 14 19 205 449 Boston ...... 1 ...... 12 29 4 Cincinnati ...... 1 6 Detroit ...... 1 ...... 5 10 1 Mid west ...... 6 7 73 176 26 Pacific Coast ...... I 4 2 17 83 10 Philadelphia-Baltimore-Washington ...... I 1 3 40 83 12 Pittsburgh ...... : 1 1 II 12 2 Other regional exchanges ...... 31 3 ~ or moreregional exchanges ...... _ ...... 6 46 19 ~7

Amex membership includes associate members. Includes member firms of the following exchanges: BSE, 23; CSE, 5; DSE, 28; MSE, 64; PCSE, 28; PBSE, 19; PSE, 3; other regional exchanges, 8.

TABLE VIII-67.--Total exchange income and gross commission income o1" all members and dual members on ~ regio,nal stock exchanges (Boston, Midwest, Pacific Coast, Philadelphia-Baltimore-Washington), 1961 ~

Total ex- (]ross com- change in- mission in- come ~ come

BSE: All members...... $3, 363, 288 $3,188, 303 Dual members ...... $2, 490,106 $2, 343, 779 Dual members as percent of all members ...... 74.0 73.6 MSE: All members ...... $24, 2"22, 4~0 $19,098, 356 Dual members ...... $14,108, 425 $13, 501,516 Dual members as percent of all members ...... 58.2 70.7 PCSE: All members ...... $20,185, 061 $17,1~0,662 Dual members ...... $11, 111, 700 $11, 941,414 Dual members as percent of all members ...... 55. 0 69. 6 PBWSE: All members ...... $8, 643, 019 $7, 242, 051 Dual members ...... $4, 447, 767 $4, 538. 522 Dual mebers as percent of all members ...... 51.5 62. 7

Income reported for fiscal years was treated as if the fiscal year ended Dec. 31, 1961. Includes income as specialist, odd-lot dealer and floor broker, trading profits, arbitrage, and give-ups. REPORT OF SPECIAL STUDY OF SECURITIES MARKETS 1079

T~B~ ¥III-68.--Conven~ration o? exchangv income among all members and among dua~ members on ~ regional stock exchanges (Boston, Midwest, Pa~’iflv Coast, philagelphia-Baltimore-Washington ) , 196I

All members Dual members Exchange income of dual Groups of members (arranged according member~ to size of exchange income) Exchange As percent Exchange As percent as percent income2 of an income 2 of all of exchange (dollars) grou~ps (dollars) groups income of all members

Boston Stock Exchange

All groups ...... 3, 363, 288 100. 0 2, 490,106 100. 0 74. 6 1st 20 percent of members (with highest income) ...... 2,153, 594 64. 0 1,789, 335 71.9 8,3.1 2d 20 percent of members...... 696, 555 20. 8 595, 961 23.9 85. 6 3d 20 percent of members...... 370, 937 11.0 77, 589 3.1 20.9 4th 20 percent of members...... 115, 555 3.4 12, 567 .5 10. 9 5th 20 percent of members (with lowest incomes) ...... 26, 647 .8 .6 55. 0

Midwest Stock Exchange

All groups ...... 24, 222, 460 100.0 14,108, 425 100.0 1st 20 percent of members (with highest incomes) ...... 16, 427, 043 67. 8 12, 444, 318 88.2 75.8 2d 20 percent of members...... 4, 256, 602 17. 6 1,092, 510 7.8 25. 7 3d 20 percent of members ...... 2,182, 399 9.0 327, 343 2.3 15.0 4th 20 percent of members ...... 1,137, 446 4.7 164, 320 I.I 14.4 5th 20 percent of members (with lowest incomes) ...... 21~, 970 .9 79,934 .6 36. ~

Pacific Coast Stock Exchange

All groups ...... 20,185, 061 100. 0 11, 111,700 100. 0 55. ¢ 1st 20 percent of members (with highest incomes) ...... 11,764, 374 58.3 8, 550, 008 76.9 72.7 2d 20 percent of members...... 4, 407, 002 21.8 1, 654,171 14.9 37. ~ 3d 20 percent of members...... 2, 305, 822 11.4 509, 822 4.6 22.1 4th 20 pcrcent of members...... 1, 421,875 7.0 336, 682 3.0 23.~ 5th 20 percent of members (with lowest incomes) ...... 285,988 1.5 61,017 .6 21.~

Philadelphia-BMtimore-Washington Stock Exchange

All groups ...... 8, 643, 019 100. 0 4, 447, 767 100. 0 51. ~ 1st 20 percent of members (with highest inc6mes) ...... 5, 457, 288 63.2 3, 737, 499 84. 0 58.~ 2d 20 percent of members ...... I, 740, 428 20. 2 384, 066 8.6 22.( 3d 20 percent of members ...... 878, 438 10. 1 163,272 3.7 18. { 4th 20 percent of members...... 442, 713 5.1 126, 950 2.9 28.7 5th 20 percent of members (with lowest incomes) ...... 124,152 1.4 35, 980 .8 29.~

Income reported for fiscal years was treated as if the fiscal year ended Dec. 31, 1961. Includes income as specialist odd-lot dealer and floor broker, trading profits, arbitrage and give-ups. ]080 REPORT OF SPECIAL STUDY OF SECURITIES MARKETS

TABLE ¥III--69.--Importance of various sources of income to dual members regional stock exchanges (Boston, Midwest, Pacifi~ Coast, Philadelphia-Balti- more-Washington)

Public commission Odd-lot Public Over-the- Mutual Underwrit- Rank businesson dealer commission counter fund ing and/or Other regional specialist business on trans- sales distribut- exchange NYSE ~ctions ing

Boston Stock Exchange

2 ...... 2 7 12 :_’_-:-_-_’_-_- 6 3 ...... 9 1 9 4

Midwest Stock Exchange

2 ...... 9 1 21 28 18 7 3 ...... 13 1 II 34 20 6

Pacific Coast Stock Exchange

3 ...... 9 ...... 9 7 11 6

Philadelphia-Baltimore-Washington Stock Exchange

1 ...... 35 I I0 I 1 4 1 2 ...... 5 1 13 17 1 12 1 3 ...... 9 ...... 2I 17I 4 14 4

TABLE VIII-70.--Impo.rtance of vc~rious sources o7 income to sole members o~ $ regiona~ stock e~changes (Boston, Midwest, Pacific Coast, Philadelphia-Balti- more-Washington)

Public com- Over-the- Under- mission Floor Odd-lot Activities counter Mutual writing Rank business broker on dealer on the transac- fund and/or Other on regional regional specialist A~nex tions sales distribut- exchange ing

Boston Stock Exchange

2 ...... 19 ...... 5 2 3 1 3 ...... 4 "_’:’-:.’:::: ~. 4 u ~ 2

Midwest Stock Exchange

1 ...... 40 27 ] 17 1 74 18 27 22 2 ...... 49 15I 9 4 58 30 33 13 3 ...... 60 2 2 2 34 47 18 17

Pacific Coast Stock Exchange

2 ...... 20 5 1 -.’::--_-_-:_- ." 19 5 11 6 3 ...... 22 4 1 I0 I0 II 2

Philadelphia-Baltimore-Washington Stock Exchange

2 ...... 29 8 5 17 13 16 4 3 ...... ! 25 2 2 14 21 i0 7 REPORT OF SPECIAL STUDY OF SECURITIES I~IARKETS 1081

TABLE VIII-71.--Bo~ton Stovl~ Exchange---Distributia~ o~ perce~t o~ income earneel in various exchange activities [Number of members]

Percent of income earned I 70.0 } 80.0 9O.0 to to to to to[ to to 9.9 19.9 29.9 39.9 49.9 ] 59.9 69.9 79.9 89.9 100.0

Dual members

Net commissions ...... 1 Gross trading profits from specialist activities ...... 1 Gross commissions from specialist ac- tivities ...... 1 Floor broker ...... 2 Clearing fees ...... 1 Give.ups ...... Trading profits and arbitrage transac- Other ......

Sole members

Net commissions ...... 1 Gross trading profits from specialist activities ...... 1 Gross commissions from specialist ac- tivities ...... Floor broker ...... Clearing fees ...... Give-ups ...... __ ...... Trading profits and arbitrage transac- tions ...... Other ......

TABLE VIII-72.--Midwest Stock Exchange---Distribution of percent o] income earned in various exchange activities [Number of members]

Percent of income earned

0 10.0 20.0 30.0 40.0 50.0 60.0 [ 70.0 8O.0 9O.0 to to to to to to to to to to g.g 19.9 29.9 39.9 49.9 59.9 69.9 79.9 89.9 100.0

Dual members

Net commissions ...... 1 1 1 2. 4 97 Gross trading profits from specialist activities ...... 5 2 1 3 1 3 Gross commissions from specialist acti cities ...... Floor broker ...... 5 3 Clearing fees ...... Give-ups ...... Trading profits and arbitrage trans- actions ...... Other ......

Sole members

Net eemmissions ...... 4 8 1 13 25 Gross trading profits from specialist activities ...... 6 1 5 4 4 3 Gross commissions from specialist activities ...... 8 3 1 1 Floor broker ...... 18 ~ 21 7 4 17 Clearing fees ...... 7 3 4 1 1 Give-ups ...... 72 10 I1 2 2 1 Trading profits and arbitrage trans- actions ...... 20 6 5 3 1 1 ...... 4 Other ...... 5 1 2 1082 REPORT OF SPECIAL STUDY OF SECURITIES MARKETS

TABLE VIII-73.--Pacifiv Coast Stock Exchange--Distribution of percent income earned i’m various exchange activities [Number of members]

Percent of income earned

0 10.0 20.0 30.0 40.0 50.0 60.0 to to to to to to to 9.9 19.9 29.9 39.9 49.9 59.9 69.9 79.9 89.9 I00.0

Dual members

Net commissions ...... 2 1 Gross trading profits from specialist activities ...... 1 1 11 ...... , 2 Gross co~missions from specialist ac- tivities ...... 4 Floor broker ...... 12 C lezxing fees ...... 3 Give-ups ...... 6 Trading profits and arbitrage trans- actions ...... 7 Other ...... 2

Sole members

Net commissions ...... 4 1 8i 6 OJ 21 Gross trading profits from specialist activities ...... 1 1 21 3 21 2 ...... Gros~ co~missions from specialist ti cities ...... 6 5 1 Floor broker ...... 14 10 9 11 3 11 2 ...... [ 3 Clearing fees ...... 5 1 1 Give-ups ...... 23 7 1 Trading profits and arbitrage trans- actions ...... 10 3 1 11 2 Other ...... 4

TABLE VIII-74.--Philadelphia-Baltimore-Washington Stock E~change--Distri- butio~ of percent of income earned in various evchange activities [Number of members]

Percent of income earned

10.0 20.0 30.0 40.0 50.0 60.0 70.0 80.0 90.0 to to to to to to to to to 19.9 29.0 39.9 49.9 59.9 69.9 79.9 89.9 100.0

Dual members

Net commissions ...... 1 1 Gross trading profits from specialist ac- tivities ...... 3 2 1 1 ...... Gross commissions from speciMist activities ...... Floor broker ...... Clearing fees ...... 3 Gi re-ups ...... 2 Trading profits and arbitrage transac- tions ...... 4 Other ......

Sole members

Net commissions ...... 2 5 7 51 9 15 13 27 Gross trading profits from specialist activities ...... 3 3 2 3 Gross commissions from specialist ac- tivities ...... 1 I Floor broker ...... ----~ 2 1 2 2 4 2 1 3 1 Clearing fees ...... 5 2 4 I 1 1 1 Give-ups ...... ; ...... 12 13 13 6 2 1 6 1 1 Trading profits and arbitrage ~ransac- tiGriS ...... 2 2 Other ...... ~ 1 TABLE VIII-75.--Common stocks traded on N YSE analyzed by number of other exchanges on which traded, N YSE volume, shares listed on N YSB, ~ and number of shareholders (196~) [Shares in thousands]

Stocks NYSE volume Shares listed on NYSEs Shareholders Exchange Percent Percent Average Percent Average Percent Average Number o! total Shares of total shares per Shares of total shares per Number of total number stock stock per stock

Total ...... 1,168 100. 0 940, 542 100. 0 805 7, 410, 513 100. 0 62,393 26,102, 337 100. 0 22, 34~ ~’YSEonly ...... 399 34. 3 128, 056 13.6 321 831,948 11.2 2, 0i2 2, 440, 004 9. 3 6, 116 ~YSE-t-1 Reg ...... 33O 28.2 151, 683 16.1 460 1,012,465 13. 7 3, 019 2, 83~, 240 10. 9 8, 604 ~’YSE@2Reg ...... 130 11.1 116, 099 12.3 893 852,193 11.5 6, 450 2, 369, 595 9. 1 18. 228 ;/~£ SEW3Reg ...... 81 6.9 79, 021 8.4 976 550,617 7.4 6, 689 1, 854, 705 7.1 22. 898 4Y SE+4 Reg ...... 78 6.7 97, 802 10.4 1,254 786,476 10. 6 9, 921 2, 829, 728 10. 8 36, 279 4Y SE-t-5 Reg ...... 62 111,578 11.9 1,800 752,346 10. 2 11,906 2, 653, 581 10. 2 42, 780 4YSE+6Reg ...... 48 127, 031 13.5 2,646 1,099,564 14. 8 22, 458 3, 647, 040 14. 0 75, 981 ~’Y BE-{-7Reg ...... 40 129, 272 13.8 3,232 1,524,904 20. 6 37, 510 7, 468, 444 28. 6 186, 711

As of Dec. 31, 1962. 8 As of ~uly 31, 1962. Reported volume for the year 1962. ~ As of the middle of 1962. T~BLE VIII-76.--Number of stocks and share and dollar volume of sales effeded on registered regional stock exchanges, in stocks traded solely on regional exchanges, and in dually traded stocks t (year 1961) ~

All stocks Stocks traded solely on regional exchanges Dually traded stocks

Stocks Share volume Dollar volume Stocks Share volume Dollar volume ¯ Share (estimate) (estimate) Exchange Num- vol- Dollar ber of ume volume Amount stocks (thou (thousand Per- Num- Per- Amount Per- Per- Num- Per- Per- sands) dollars) Num. cent of bet cent of (thou- cent of Num- cent of bet cent of (thousand cent of ber all (thou- all sand all ber all (thou- all dollars) all stocks sands) stocks dollars) stocks stocks sands) stocks stocks

94. 8 Boston...... 451 6, 268 318, 520 19 4.2 168 2.7 16, 501 5.2 432 95. 8 6, I00 97. 3 302, 019 14.2 ¯ 155 17.3 6, 245 13.4 133 85. 8 739 82.7 40, 294 86. 6 Cincinnati...... 155 894 46, 539 22 228, 910 95. 2 Detroit...... 239 6, 533 240, 532 12 5. 0 697 10. 7 11, 622 4,8 227 95. 0 5, 836 89. 3 16.6 19. 8 113, 832 6.5 428 83.4 35, 122 80.2 1, 647, 914 93.5 Midwest...... 513 43, 791 1, 761, 746 85 8, 669 48. 0 1,130.320 88. 6 PacificCoast ...... 578 70, 639 1,275, 110 9O 10. 4 36,741 52.0 144,79O 11.4 518 89. 6 33, 898 88 13. 9 547 3.4 8, 179 1.2 546 86. 1 96.6 655, 141 98. 8 Philadelphia-Baltimore ...... 634 16, 003 663, 320 053 90, 5 Pittsburgh ...... 118 1, 026 35, 400 9 7.6 3,58 34. 9 3,347 ~ 5 109 92.4 ~15,~65 65.1 32, 93.0 Total, excluding mining exchanges. 1 3 2, 688 145, 154 4, 341, 167 295 11.0 47,335 32:i 3O4,516 7.0 ~ 2, 393 97, 67:’4 4, 036,651 173 5.7 89 19, 573 :: "3, 049 83 93.3 19,467 99. 5 2, 876 94.3 6 6.7 106 .5 Salt Lake ...... 2, 891 99. 9 1 2.4 2 .1 3 .I Sgn Fruncisco Mining ...... 42 20, 129 2, 894 41 97. 6 20, 127 99. 9 53.9 Spokane ...... 29 7, 729 4, 718 21 72.4 7, 485 0~. 8 2.175 46.1 8 27. 6 244 3.2 2,543 25.5 Total, mining exchanges ...... 3 160 47, 431 10. 661 145 90. 6 47, 079 99. 3 7, 942 74.5 ~ 15 9. 4 352 .7 2, 719 Total, all registered regional e~* s changes ...... 2, 848 I’92, 585 4, 351, 828 440 15. 4 94, 414 49.1 312, 458 7. 2 ~ 2, 408 84.6 98, 171 50. 9 4, 039, 370 92.8

x A "dually traded" stock is one which is available for trading on the NewYork Stock ~ The total number of stocks includes duplications where the same issue is traded on or American Stock Exchange as well as on a regional stock exchange. more than 1 regional exchange. 3 Volumeand value of sales for the year 1961; number of stocks as of June 30, 1961. REPORT OF SPECIAL STUDY OF SECURITIES IVIARKETS 1085

TABLE VIII-77.--Specia$ists’ book# in selevteg New York Stock Exchange and regiona~ exchange stocks selling at $1 to $50 per share (Feb. 16 and July 6, 1965)

New York Stock Exchange Regional exchanges Number of shares on specialist’s book Number of Number of Trading Number of I Number of I Trading stocks shares on volume ~ stocks shares on [ volume ~ book ~ book ~ I Feb. 16, 1962 July 6, 1962

1,080 to 2,000 ...... 2 3, 850 ...... 1 1, 427 108 2,100 tO 4,000 ...... 6 17, 346 2. 257 4,100 to 6,000 ...... 5 24, 268 5. 340 6,100 to 10,080 ...... 1 9, 400 500 6 45, 493 3,350 10,100 to 20,000 ...... 6 96, 900 7, 000 7 102. 459 3, 148 20,100 to 30,000 ...... 3 79, (~00 4, 200 1 29 208 69O 30,100 to 50,000 ...... 4 178. 200 8. 100 2 62, 137 2, 031 50.100 to 100,000 ...... 1 58. 008 3,080 2 146. 303 4. 235 100,100 and over ...... 7 2, 366, 080 54, 900 1 108. 066 2,515 Total ...... 24 2, 792, 450 77, 700 31 536, 707 23,116

Does not include odd lots. Includes odd lots. NoT~..--The stocks on the regional exchanges studied are listed in app. VIII-D. The stocks on the NYSEstudied are listed in app. VIII-C. TABLE VIII-78.--Reasons dual members execute orders on the regional stock exchanges [Number of members]

Orders orig- Reduce Reciprocal Retain Reports of inated in market Better price Instruction arrangement larger per- Save New executions Reduce time Trade after Rank vicinity impact available on by custom- with another centage of York State are received involved in NYSE Other of the on regional ers to member of grosscom- transfer more transferring closes exchange NYSE exchange "give up" the regional missions tax quickly securities exchange

Boston Stock Exchange

...... 9 ...... 1 ...... 1 5 7 ...... 5 ...... 3 8 ...... 2 l ! 1__._-_-:.:::-__.._:-_:: ...... _2. - ...... i":::::::::::::: ...... _~

Midwest Stock Exchange

...... 5 4 18If’----’""-" ----i 5 12 12 1 I ...... ’ 34 ...... 3 10 7 ::: -- 5 18 23 4 1 ...... ~ 17 ...... 3 8 5 1 7 26 14 4 ...... 3

Pacific Coast Stock Exchange

...... 4 1 14 1 4 8 1 2 ...... 8 1 ...... 4 3 8 1 1 3 3 3 ~ I 10 3 ...... 2 2 2 1 3 2 10 5 1] 9 1

Philadelphia-Baltimore-Washington Stock Exchange

...... 2 1 2 3 7 21 4 1 ...... 2 ...... 4 7 1 ...... 3 2 19 2 2 ...... 1 ...... 4 5 ...... 1 1 1 II 5 2 ...... 4

Based on responses to Questionnaire EX-4. ~ Included in "Other" is the reason "As good a price as the NYSEis available on the MSE"which reason was given by 29 of the firms that ranked "Other" 1st, and 13 of the firms that ranked it 2d. REPORT OF SPECIAL STUDY OF SECURITIES lVIARKETS 1087

TABLE VIII-79.--Volume of round-lot trading in 50 selected stocks on 3 regional stock exchanges (Midwest, Pacific Coast, Philadelphia-Baltimore-Washington), week ended Jan. 27, 1961 [Number of shares]

NYSE NYSE Regional Regional rol,nd- Regional i volt,me ro,,nd- vol,~me as Stock lot offsets less lot of volume on NYSE offsets volume NYSE volume (1) (2) (3) (4) (5)

Allis Chalmers ...... 3, 000 41,700 7, 600 18. 22 American Motors ...... 900 136, 600 15, 400 11.27 American Telephone & Telegraph ...... 16, 800 197, 700 22, 100 11.18 ArmcoSteel ...... 100 12, 400 1, 400 11.29 Atchison, Topeka & Santa Fe ...... 1, 183 38, 117 7, 300 19. 15 Bendix Corp_ =...... 500 12, 200 1, 000 8. 20 Borg-Warner Corp ...... 1, 800 16, 400 2, 200 13.41 Carrier Corp ...... 300 9, 900 1, 400 14.14 Cities Service ...... 800 17,100 1, 700 9.94 CommonwealthEdison ...... 300 11,900 2, 600 21.85 Columbi~ Gas System ...... 33, 200 4, 800 14.46 Cons-mers Power ...... 1, 000 7,100 2, 700 38. 03 El Paso Natural Gas ...... 1, 300 60, 200 7, 500 12. 46 Foremost Dairies ...... 200 19, 300 2, 600 13.47 General Dynamics ...... 1, 600 44, 700 3, 400 7. 61 General Electric ...... 5, 500 228, 000 19, 000 8. 33 General Mills ...... 1, 700 16, 100 13, 400 83.23 General Motors ...... 12, 900 119. 500 37, 900 31.72 General P1~blic Utilities ...... 1, 200 18, 200 2, 300 12.64 General Telephone & Electronics ...... 2, 000 158, 100 14, 200 8. 98 W. R. Grace ...... 500 18. 700 4, 800 25. 67 Greyho~mdCorp ...... 9, 000 1, 700 18.89 Gulf Oil ...... 4, 800 83, 500 36, 900 44.19 International Paper ...... 1, 400 63, 700 9, 600 15. 07 Montgomery Ward ...... 1, 500 46, 200 7, 300 15. 80 Morris (Philip) ...... 300 13 000 2, 200 16. 92 Pacific Gas & Electric ...... 1, 100 15, 000 4, 900 32.67 Penney (J. C.) ...... 2, 100 15, 200 500 3.29 Pennsylvania RR ...... 1, 000 51. 700 5, 300 10. 25 Pullman, Inc ...... 600 8, 000 1, 000 12.50 Sears, Roebuck ...... 400 29, 200 4, 500 15.41 Socony Mobil Oil ...... 200 64, 700 7, 000 10.82 Southern California Edison ...... 400 12, 800 4, 400 34. 38 Southern Co ...... 1. 200 18, 000 1,400 7.78 Southern Pacific ...... 1, 800 34, 700 9, 300 26. 80 Standard Oil (California) ...... 100 44, 500 11, 900 26. 74 Standard Oil (Indiana) ...... 800 43, 900 3, 000 6.83 Standard Oil Co. (N.$.) ...... 13, 100 252. 300 36, 400 14.43 Standard Oil (Ohio) ...... 300 5. 300 100 1.89 Studebaker-Packard ...... 3, 400 93, 900 12, 300 13. 10 Sunray Mid-Continent Oil Co ...... 34, 300 5, 400 15.74 Swift & Co ...... 900 12, 200 1,800 14. 75 Tennessee Gas Trans ...... 400 148 000 23, 000 15.54 Textron ...... 200 36, 200 4, I00 11.32 Tidewater Oil ...... 23, 500 3,000 12. 76 Trans America ...... 1, 700 43, 500 4, 800 11.03 Union Electric ...... 1, 500 12, 900 1, 100 8.53 Union Oil (California) ...... 9, 300 1, 600 17.20 United Fruit ...... 700 56, ~00 5, 800 10. 32 Steel ...... 1, 600 66, 300 12, 900 19.46 To~al 15.54

REPORT OF SPECIAL STUDY OF SECURITIES I~.ARKETS 1089 1090 REPORTOF SPECIAL STUDY OF SECURITIES MARKETS

APPENDIXES

APPENDIX VIII-A

QUESTIONNAIRE IN-4

TO INSTITUTIONAL INVESTORS CONCERNING EXECUTION OF BLOCK TRANSACTIONS~ AND PRACTICES RELATED THERETO

SECURITIES AND EXCHANGE COMMISSION WASHINGTON2.5, D.C. SPECIAL STUDY OF SECURITIES MARKETS July 20, 1962

To: Selected Companies llaving Retirement Funds

Gentlemen:

Under the provisions of Public L~w 87-196 (1961), the Commission authorized and directed to make a broad study of the securities markets and rules and practices relatlng thereto. This letter and accompanying forms are being sent to a sample of various typos of instltutlonal inves- tors to obtain information regarding common stock transactions for speci- fied periods. The fact that you have received this letter is not to be construed as a reflection upon your institution or anyone connected with it, or upon its trading or investment practices.

You are requested to complete the attached Forms IN-l, 2 and 3 with respoct to the c~on stock transactions of all pension, proflt-sharing and retirement funds combined for the corporation and its consolldated subsidiaries.

Form IN-1 should be completed with respoct to all transactions in the aggregate in all c~on stocks, for the months, weeks and.days indi- cated on the form.

Form IN-2 should be completed with respect to all transactions in the aggregate in all coumon stocks listed on the New York Stock Exchange, for the months, weeks and days indicated on the form. You should report on Part A of the form only transactions in ~uch stocks whlch were executed on the New York Stock Exchange, and on Part B of the form all transactions in such stocks which were executed elsewhere.

A separate Form IN-3 should be completed with respoct to the trans- actions in each of the following eight common stocks, for the months, weeks, and days indicated on the form. The name of the stock to which the form relates should be inserted in the space indicated at the top of the form. You should report on Part A of the form only transactions in the stock which were executed on the New York Stock Exchange, and on Fart B of the form all transactions in the stock which were executed elsewhere.

I. American Telephone & Telegraph Co. 2. AVCO Corp. 3. Brunswick Corporation 4. General Hotors Corp. 5. Ko~vette (E.J.) Inc. 6. International Business l(achines Corp. Standard O11 CO. of New Jersey 8. U.S. Steel Corp. REPORT OF SPECIAL STUDY OF SECURITIES MARKETS 1091

You are requested to complete the enclosed Forms IN-l, 2 and 3 and return them on or before &ugust 14, 1962, to the Securities and Exchange C~isslon, Special Study of Securities Markets, Washington 25, D.C.

Some of the institutional Investors receiving this letter and the enclosed Forms IN-I, 2 and 3 are also being sent herewith an additional Questionnaire (with appended Forms A, B and C), designated IN-4. Ques- tionnaire IN-4 and its appended forms relate to practices regarding the execution of transactions In portfolio equity securities. If you are a recipient of Questionnaire IN-4 and its appended forms, you are requested to complete a Questionnaire and Forms IN-4 for all of the pension, profit- sharing, and retirement funds for the corporation and its consolidated subsidiaries combined, except that separate filings m~y be m~de for indi- vidual plans where this would be more convenient or where practices or administration differ among them. The completed Questionnaire and Forms IN-4 should be returned on or before August 27~ 1962, to the Securities and Exchange Co~isslon, Special Study of Securities Markets, Washington 25, D.C.

Additional copies of Forms IN-l, 2 and 3, and Questionnaire IN-4, if needed, may be obtalned from the Securities and Exchange Comlsslon, Publi- cations Unit, Washington 25, D.C. All inquiries regarding Forms IN-I, 2 and 3 should be directed to either Mr. Gordon D. Henderson (Room 265 Telephone~ WOrth 3-3195) or Dr. Leslie Anderson (Room 286 - Telephone WOrth 2-3350), and all inquiries regarding Questionnaire IN-4 should be directed to either Mr. Henderson or Dr. Sidney M. Robbins (Room 141 Telephone WOrth 2-4261) at the above address. , /~ncere~y yours, ~ilton H. Cohen Director

Enclosures: Forms INol Forms IN-2 Forms IN-3

Questionnaire IN-4 (and Forms A, B and C)

[Note: Questionnaires IN-l, 2, and 3 appear in an appendix to ch. XIll.l 1092 I~EPORT OF SPECIAL STUDY OF SECURITIES MARKETS

SECURITIES AND EXCHANGE COMMISSION WASHINGTON2.5, D.C.

SPECIAL STUDY OF SECURITIES MARKETS

July 20, 1962

To: Selected Banks flaying Co~mon Trust Funds

Gentlemen:

Under the provisions of Public Law 87-196 (1961), the Co~isslon authorized and directed to make a broad study of the securities markets and rules and practices relating thereto. This letter and accompanying forms are being sent to a sample of various types of institutional inves- tors to obtain information regarding co~on stock transactions for speci- fied periods. The fact that you have received this letter is not to be construed as a reflection upon your institution or anyone connected with it, or upon its trading or investment practices.

You are requested to complete the attached Forms IN-I, 2 and 3 with respect to the comon stock transactions of all of your discretionary common trust funds combined.

Form IN-1 should be completed with respect to all transactions in the aggregate in all co~on stocks, for the months, weeks and days indicated on the form.

Form IN-2 should be completed with respect to all transactions in the aggregate in all co~aon stocks listed on the New York Stock Exchange, for the months, weeks and days indicated on the form. You should report on Part A of the form only transactions in such stocks which were executed on the New York Stock Exchange, and on Part B of the form all transactions in such stocks which were executed elsewhere.

A separate Form IN-3 should be completed with respect to the trans- actions in each of the following eight comon stocks, for the months, weeks and days indicated on the form. ~The name of the stock to which the form relate8 should be inserted in the space indicated at the top of the form. You should report on Part A of the form only transactions in the stock which were executed on the New York Stock Exchange, and on Part B of the form all transactions in the stock which were executed elsewhere.

I. American Telephone & Telegraph Co. 2. AVCO Corp. 3. Brunswick Corporation 4. General Motors Corp. 5. Korvette (E.J.) Inc. 6. International Business Machines Corp. 7. Standard Oil Co. of New Jersey 8. U.S. Steel Corp. REPORT OF SPECIAL STUDY OF SECURITIES MARKETS 1093

You are requested to complete the enclosed Forms IN-l, 2 and 3 and return them on or before August 14~ 1962, to the Securities and gxchange C~isslon, Special Study of Securities Harkets, Washington 25, D.C.

Some of the institutional investors receiving this letter and the enclosed Forms IN-I, 2 and 3 are also being sent herewith an additional Questionnaire (with appended Forms A, B and C), designated IN-4. Ques- tionnaire IN-4 and its appended forms relate to practices regarding the execution of transactions in portfolio equity securities. If you are a recipient of Questionnaire IN-4 and its appended forms, you are requested to complete a Questionnaire and Forms IN-4 for all of your discretionary co~on trust funds combined, and to return the completed Questionnaire and Forms IN-4 on or befor~ August 27~ 1962, to the Securities and Exchange ~ission, Special Study of Securities Harkets, Washington 25, D.C.

Additional copies of Forms IN-I, 2 and 3, and Questionnaire IN-4, if needed, may be obtained from the Securities and Exchange Co~Ission, Publi- cations Unit, Washington 25, D.C. All inquiries regarding Forms IN-l, 2 and 3 should be directed to either Hr. Gordon D. Henderson (Room 265 Telephone WOrth 3-3195) or Dr. Leslie Anderson (Room 286 - Telephone WOrth 2-3350), and all inquiries regarding Questionnaire IN-4 should be directed to either Hr. Henderson or Dr. Sidney H. Robbins (Room 141 Telephone WOrth 2-4261) at the above address.

~/~l’~cerely yours,

Director

gnclosures: Forms IN-1 Forms IN-2 Forms IN-3

Questionnaire IN-4 (and Forms A, B and C)

[Note: ~uestionnalres IN-l, 2, and 3 appear in an appendix to ch. Xlll. J

96-746 O- 63-pro2-70 1094 REPORT OF SPECIAL STUDY OF SECURITIES MARKETS

SECURITIES AND EXCHANGE COMMISSION WASHINGTON25, D.C.

SPECIAL STUDY OF SECURITIES MARKETS

July 20, 1962

To: Selected Institutional Investors

Gent lemen:

/ Under the provzszonso o of Public Law 87-196 (1961), the Co~mlsslon authorized and directed to make a broad study of the securities markets and rules and practices relating thereto. This letter and accompanying forms are being sent to a sample of various types of institutional inves- tors to obtain information regarding common stock transactions for speci- fied periods. Th~ fact that you have received this letter is not to be construed as a reflection upon your institution or anyone connected with it, or upon its trading or investment practices.

Form IN-1 should be completed with respect to all transactions in the aggregate in all co~on stocks, for the months, weeks and days indi- cated on the form.

Form IN-2 should be completed with respect to all transactions in the aggregate in all common stocks listed on the New York Stock Exchange, for the months, weeks and days indicated on the form. You should report on Part A of the form only transactions in such stocks which were executed on the New York Stock Exchange, and on Part B of the form all transactions in such stocks which were executed elsewhere.

A separate Form IN-3 should be completed with respect to the trans- actions in each of the following eight common stocks, for the months, weeks and. days indicated on the form. The name of the stock to which the form relates should be inserted in the space indicated at the top of the form. You should report on Part A of the form only transactions In the stock which were executed on the New York Stock Exchange, and on Part B of the form all transactions in the stock which were executed elsewhere.

I. American Telephone & Telegraph Co. 2. AVCO Corp. 3. Brunswick Corporation 4. General Motors Corp. 5. Korvette (E.J.) Inc. 6. International Business Machines Corp. 7. Standard Oil Co. of New Jersey 8. U.S. Steel Corp. REPORT OF SPECIAL STUDY OF SECURITIES I~iARKETS 1095

You are requested to complete the enclosed Forms IN-l, 2 and 3 and return them on or before August 14~ 1962, to the Securities and Exchange Commission, Special Study of Securities Markets, Washington 25, D.C.

Some of the institutional investors receiving this letter and the enclosed Forms IN-l, 2 and 3 are also being sent herewith an additional Questionnaire (with appended Forms A, B and C), designated llq-4. Ques- tionnaire IN-4 and its appended forms relate to practices regarding the execution of transactions in portfolio equity securities. If you are a recipient of Questionnaire IN-4 and its appended forms, you are requested to complete and return them on or. before Au~us.t 271 1962, to the Securities and Exchange Co~alssion, Special Study of Securities I~arkets, Washington 25, D.C.

Additional copies of Forms IN-l, 2 and 3, and Questionnaire IN-4, if needed, may be obtained from the Securities and Exchange Co~aission, Publi- cations Unit, Washington 25, D.C. All inquiries regarding Forms IN-l, 2 and 3 should be directed to either Mr. Gordon D. Henderson (Room 265 Telephone WOrth 3-3195) or Dr. Leslie Anderson (Room 286 - Telephone WOrth 2-3350), and all inquiries regarding Questionnaire IN-4 should be directed to either Mr. Henderson or Dr. Sidney M. Robbins (Room 141 Telephone WOrth 2-4261) at the above address.

.~cerely yours,

Hilton H. Cohen Director

Enclosures: Forms IN-1 Forms IN-2 Forms IN-3

Questionnaire IN-4 (and Forms A, B and C)

[Note: Questionnaires IN-I, 2, and 3 appear in an appendix to ch. XIII.] 1096 REPORT OF SPECIAL STUDY OF SECURITIES MARKETS

SECURITIES AND EXCHANGE COMMISSION WASHINGTON25, D.C. SPECIAL STUDY OF SECURITIES MARKETS

July 20, 1962

To: Selected Open-End Investment Companies

Gentlemen:

Under the provisions of Public Law 87-196 (1961), the Commission authorized and directed to make a broad study of the securities markets and rules and practices relating thereto. Enclosed you will find a copy of Questionnaire IN-4 and accompanying Forms A, B and C.

The questionnaire and forms are being sent to a sample of various types of Institutional investors to obtain information regarding their practices in connection with their execution of transactions in portfolio equity securities.

You are requested to complete the enclosed Questionnaire IN-4 and appended forms, and return them on or before August 27, 1962~ to the Securities and Exchange Co~mlsslon, Special Study of Securities Harkets, Washington 25, D.C.

The fact that you have received this letter and enclosed questionnaire and forms is not to be construed as a reflection upon your institution or anyone connected with it, or upon its trading or investment practices.

Sincerely yours,

Hilton H. Cohen Director

Enclosures: Questionnaire IN-4 (and Forms A, B and C) REPORT OF SPECIAL STUDY OF SECURITIES MARKETS I097

Budget Bureau Approval No. 71-6213

SPECIAL STUDY OF SECURITIES MARKETS

Securities and Exchange Commission Washington 25, D. C.

iNSTITUTIONAL INVESTOR QUESTIONNAIRE

Name of Respondent

Address

INSTRUCTIONS

Every question in this quesclonnalre and every form appended to it should be completed in full. If there is no information td report or if the question is not applicable, you should answer "None" or "Not Appllcable." If the space provided for any answer herein is insufficient, the co~plete answer should be prepared on a separate sheet to be attached to the questionnaire and identified as "Answer to Question __." You should also consider the instructions set forth on the attached forms, in connection with completion of those forms.

You may answer any question on this questlonnalre by appropriate cross-reference to information supplied in response to another question.

Your attention is directed to the provisions of Title 18, U.S.C., Section lO01, which makes it ~ criminal offense to submit false informa- tion to a federal government agency.

The completed questionnaire together with appended forms should be returned to: Securities and Exchange Commtlsslon, Special Study of Securities Markets, Washingto~ 25, D. C.

Additional copies of }ox~s A, B and C may be obtained by mailing the enclosed order form to Sec~rlties and Exchange Comission, Publications Unit, Washington 25, D. C. Any questions regarding this questionnaire may be addressed to either of the following persons:

Mr. Gordon D. Henderson Dr. Sidney M. Robblns Securities and Exchange Co.~uiss~on S~curlties and Exchange Commission Special Study of Secur£tles Ksrkets Special Study of Securities Markets Washington 25, D. C. Washington 25, D. C. (telephone: WOrth 3-3195) (telephone: ~Drth 2-4261)